Los Alamos National Security, LLC, is bringing in outside counsel to help it deal with the botched construction of a security upgrade at the lab.

“Performance on this project has been unacceptable to me, the LANS Board of Governors and our customer. This has damaged the laboratory’s credibility.” - Charlie McMillan

Originally, the system was supposed to cost $213 million, but cost overruns have jacked the project up to $254 million, according to a memo written by Lab Director Charlie McMillan, to employees.

The National Nuclear Security Administration is holding LANS, LLC accountable for the projected $41 million in cost overruns.

Last month, NNSA spokesman Josh McConaha said in a statement, “The performance on this project has been unacceptable and we will hold LANS fully accountable for all costs.

“We take our responsibility to protect taxpayer dollars seriously and we will use all the tools available to correct the situation.”

According to the trade journal Nuclear Weapons and Materials Monitor, LANS hired attorneys to help the lab pursue claims against subcontractors that did the work on the security system.

There are reports that the cost overruns could be paid for by money that had been earmarked for the Chemistry Metallurgy Research Replacement facility or the bonus that LANS, LLC receives for running the lab.

The publication, meanwhile, obtained a letter that was written by LANS Prime Contract Chief Steve Snook to the NNSA.
The letter stated, “Once these issues have been identified, LANS will determine whether claims may be asserted against any of the subcontractors. … This process will also provide an assessment as to the strength of each claim and discuss the probable outcome if the claims were to proceed to trial. Finally, this process will also assess LANS’ potential exposure to claims from the subcontractors.”

The lab, meanwhile, said in a statement, “LANS is accountable for completing this project, and we will do so. Part of that includes being good stewards of taxpayer money if it’s determined that certain members of the project team did not perform according to contracts and work agreements. We’re not at a point where we can share specifics about these issues, nor have we made any concrete determinations in that area, but bringing in outside counsel is a standard and prudent practice in cases such as these.”

The trade publication obtained a preliminary analysis of the project’s problems. The analysis stated that “the project spun out of control as it faced issues with technology and was hindered by contractor interface issues stemming from the project being broken up into five pieces — and didn’t have the proper project management tools to fix or understand problems as they arose.”

The most egregious problems were represented by the improper installation of fiber optic cables. The cables were supposed to be physically separated, but when they were installed in 2010, they were instead routed together. The problem wasn’t discovered until September, according to the lab’s estimate at completion submitted to the NNSA Nov. 3. Other issues include problems with the perimeter lighting system and a perimeter denial system.

The lab, meanwhile, is doing what it can to rectify the situation. McMillan appointed a three-person committee to oversee the project.

McMillan said that Tyrone “Ty” Troutman will be the Nuclear Materials Safeguards and Security Upgrades Project manager. Troutman was the construction functional manager for Bechtel Systems and Infrastructure and will report directly to McMillan. Others on the committee are Jimmie L. Willman, who will manage procurement activities and Toby

“Performance on this project has been unacceptable to me, the LANS Board of Governors, and our customer. This has damaged the laboratory’s credibility. We must do better. As we learn more about the breakdowns that occurred, we will share lessons learned,” McMillan said in a memo.